BEE: 80% of firms not complying

Manyi was reacting to the findings of a KPMG study which shows that companies across the board are falling behind on their BEE compliance. The study was released this week. Manyi said he was not surprised at the findings.

"The baseline study by the Black Business Working Group, the DTI (department of trade and industry) and the presidency conducted last year had in fact indicated a very poor performance - an average of 75% to 80% non-compliance - in more than 3 000 companies that were surveyed," he said.

Tick-box exercise

"This KPMG report is simply a confirmation of that already established fact. Companies continue to think that broad-based BEE (BBBEE) means putting together hundreds of people into a deal whereas it means performing on the seven key elements, one of which is the ownership.

"More communication is required to clarify that broad-based ownership carries a fifth of the total points. A lot of energy has been spent only on this one element by some of those that were in the tick-box exercise," Manyi said.

He said reported delays in accrediting the verification agencies was a concern.

"There are too many fly-by-nights who may want to use the gap. However, the delays should not be used as an excuse for poor progress in transformation.

"The BMF must register its disquiet about the unfinished job on the alignment process between the treasury's Preferential Procurement Policy Framework Act (PPPFA) and the DTI's BEE Codes of Good Practice.

"The implications of this misalignment have a negative and retarding effect on transformation in that the PPPFA recognises only two elements - ownership and control - out of a total of seven as contained in the BBBEE. This means that companies that are performing miserably on BBBEE can still qualify for lucrative government contracts."

The KPMG study found a worrying decline of more than 20% each in the ownership, preferential procurement and skills development elements of the scorecard.

Business was also found to be slack in affirming women into top management positions.

Social agitation

The survey is the third such study and is to run for a period of 10 years.

KPMG BEE services director Sandile Hlophe said the lack of focus and delivery of economic transformation was leading to increased social agitation by the majority lower- and middle-income black population for faster delivery.

"Organisations need to urgently realise that a meaningful scorecard rating will become one of the main factors that will affect the growth and survival of businesses going forward," he said.

He said broad-based empowerment was not only important for economic growth and acceleration.

"It is now a necessity for economic stability," he said.

As the private sector is failing to implement empowerment, it has found a partner in government, which is equally inept.

The South African National Accreditation System (Sanas) has suspended the accreditation of verification agencies and has yet to provide reasons for the suspension.

- City Press